Courtesy of Mish
Initial Reaction
Today’s establishment survey was a much weaker than expected at 138,000 jobs.
The establishment survey was 47,000 under the Econodsay consensus and 115,000 below the ADP projection. ADP was also wildly off the mark in March, estimating 263,000.
March is now revised at 50,000. BLS revisions took away a net 66,000 jobs in March and April.
The household survey was even worse. Employment fell by 233,000.
What Happened?
The roots of this weakness go back to the April report, for March.
I discussed today’s setup on April 7, in Wild Miss in Expected Jobs: Economists Blame the Weather. Here is the pertinent snip.
Today’s employment report shows a wild miss in the expected number of jobs. The Econoday consensus estimate was 175,000 and ADP expected 263,000.
Instead, the BLS reported an increase of 98,000. Economists did what they usually do in such situations: blame the weather.
“Throw ADP out, it was the weather in March! Or at least the Category 3 storm that swept the Northeast may explain a much weaker-than-expected 98,000 increase in March nonfarm payrolls. This compares with Econoday’s consensus for 175,000 and a low estimate of 125,000” says Econoday.
